Rising oil costs are likely to mean losses of US$7.4 billion in 2005 for the world's airlines, the International Air Transport Association (IATA) said Sept. 12. The new forecast by IATA comes on the heels of a jump in the projected price of oil for 2005 to an average of $57 per barrel. In May, IATA issued a loss forecast of $6.0 billion based on an average price of oil at $47 a barrel.
"Oil is once again robbing the industry of a return to profitability. Each dollar added to the price of a barrel of oil adds one billion dollars in costs to the industry," said Giovanni Bisignani, IATA's director general and chief executive.
The association of 265 airlines said US carriers are bearing the brunt of the losses. European airlines are expected to break even and Asia Pacific carriers will make a profit in the range of one billion dollars, but losses by North American carriers could exceed eight billion dollars.
Copyright Agence France-Presse, 2005